Local developer Shindico Realty was paid a commission for the police headquarters building even though the city convinced Canada Post to sell the Graham Avenue complex without putting it on the market.
Members of the executive policy committee were told this morning that Shindico received a 2.75 per cent commission on the sale -- $804,000.
Former CAO Phil Sheegl has been given credit for convincing Canada Post to sell the complex to the city.
Mayor Sam Katz defended using a brokerage firm on the project, explaining that Shindico ensured the transaction went smoothly.
"To make sure all the I’s and T’s are dotted and crossed and everything is covered," Katz said, adding that Canada Post also employed a brokerage firm for the deal.
As part of the deal Sheegl struck with Canada Post, the city extended transit service to its new mail-processing facility near the Richardson International Airport, at an annual cost of $125,000.
Chief financial officer Mike Ruta said Shindico earned the commission when it convinced Canada Post to lower its asking price to $29.25 million when it found asbestos had to be removed at a cost of $750,000. Shindico was also brought in to "ensure the deal was handled properly," Ruta said, adding the company also carried out due diligence on inspections involving other consultants.
Ruta said that over a six-month period, Shindico assembled a consulting team to work with the Winnipeg Police Service on the early stages of the project and negotiated some leases for the six-storey commercial tower.
Ruta said Shindico also brought in a second team of engineers and architects, who were paid a combined $174,000 for their work.